STATE OF INDIANA › sboa › WebReports › B46007.pdf · presentation of the financial...

STATE OF INDIANA

AN EQUAL OPPORTUNITY EMPLOYER STATE BOARD OF ACCOUNTS

302 WEST WASHINGTON STREET

ROOM E418

INDIANAPOLIS, INDIANA 46204-2769

Telephone: (317) 232-2513

Fax: (317) 232-4711

Web Site: www.in.gov/sboa

March 16, 2016 Charter School Board Central Indiana Military Academy, Inc. d/b/a Anderson Preparatory Academy 101 W. 29th Street Anderson, IN 46016 We have reviewed the Financial Statements and Independent Auditors' Report prepared by Donovan P.C., Independent Public Accountants, for the period July 1, 2014 to June 30, 2015. In our opinion, the audit report was prepared in accordance with the guidelines established by the State Board of Accounts. Per the Independent Public Accountants' opinion, the financial statements included in the report present fairly the financial condition of the Central Indiana Military Academy, Inc. d/b/a Anderson Preparatory Academy, as of June 30, 2015, and the results of its operations for the period then ended, on the basis of accounting described in the report.

In addition to the report presented herein, a Supplemental Audit Report for Central Indiana

Military Academy, Inc. d/b/a Anderson Preparatory Academy was prepared in accordance with the guidelines established by the State Board of Accounts.

The Financial Statements and Independent Auditors' Report and the Supplemental Audit Report

are filed in our office as a matter of public record.

Paul D. Joyce, CPA State Examiner

cconrad

Text Box

B46007

CENTRAL INDIANA MILITARY ACADEMY, INC.

d/b/a ANDERSON PREPARATORY ACADEMY

Financial Statements and Federal Single Audit Report

June 30, 2015 and 2014

PageIndependent Auditor's Report 1-2

Financial Statements:Statements of Financial Position 3Statements of Activities 4Statements of Cash Flows 5Notes to Financial Statements 6-15

Supplementary Information:Schedule of Expenditures of Federal Awards 16Notes to Schedule of Expenditures of Federal Awards 17

Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial StatementsPerformed in Accordance WithGovernment Auditing Standards 18-19

Independent Auditor's Report on Compliance for Each Major Program and on InternalControl Over Compliance Required byOMB Circular A-133 20-21

Schedule of Findings and Questioned Costs 22-23

Other Reports 24

CENTRAL INDIANA MILITARY ACADEMY, INC.d/b/a

ANDERSON PREPARATORY ACADEMY

Table of Contents

-1-

INDEPENDENT AUDITOR’S REPORT The Board of Directors Central Indiana Military Academy, Inc. Report on the Financial Statements We have audited the accompanying financial statements of Central Indiana Military Academy, Inc. d/b/a Anderson Preparatory Academy, which comprise the statements of financial position as of June 30, 2015 and 2014, and the related statements of activities and cash flows for the years then ended, and the related notes to the financial statements. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

-2-

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Central Indiana Military Academy, Inc. as of June 30, 2015 and 2014, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying schedule of expenditures of federal awards, as required by Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated January 11, 2016, on our consideration of Central Indiana Military Academy, Inc.’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Central Indiana Military Academy, Inc.’s internal control over financial reporting and compliance.

Indianapolis, IN January 11, 2016

See accompanying notes to financial statements.-3-

Assets 2015 2014Current assets:

Cash 711,807$ 790,380 Grants receivable 38,641 39,758 Prepaid expenses 34,164 70,556

Total current assets 784,612 900,694

Property and equipment:Land 320,000 320,000 Buildings and improvements 2,961,081 2,635,346 Furniture and equipment 1,542,405 1,256,740 Textbooks 137,197 137,197 Vehicles 41,750 41,750 Less: accumulated depreciation (1,802,365) (1,504,480)

Property and equipment, net 3,200,068 2,886,553

3,984,680$ 3,787,247

Liabilities and Net AssetsCurrent liabilities:

Accounts payable and accrued expenses 648,245$ 478,393 Current portion of long-term debt 128,902 101,474 Current portion of capital lease obligations 160,385 139,790

Total current liabilities 937,532 719,657

Long-term debt 1,827,421 1,768,392 Capital lease obligations 89,954 170,113

Total liabilities 2,854,907 2,658,162

Net assets:Unrestricted 1,039,591 1,055,994 Temporarily restricted 90,182 73,091

1,129,773 1,129,085

3,984,680$ 3,787,247

June 30



Statements of Financial Position


Temporarily TemporarilyRevenue and Support Unrestricted Restricted Total Unrestricted Restricted TotalState education support 5,451,496$ - 5,451,496 5,840,311$ - 5,840,311 Grant revenue 749,409 - 749,409 592,120 - 592,120 Student fees 124,644 79,862 204,506 127,851 78,667 206,518 Contributions 19,987 - 19,987 20,330 6,165 26,495 Fundraising and other income 124,969 110,815 235,784 154,155 91,293 245,448 Net assets released from restrictions 173,586 (173,586) - 161,947 (161,947) -

Total revenue and support 6,644,091 17,091 6,661,182 6,896,714 14,178 6,910,892

ExpensesProgram services 5,486,417 - 5,486,417 5,808,547 - 5,808,547 Management and general 1,174,077 - 1,174,077 1,239,982 - 1,239,982

Total expenses 6,660,494 - 6,660,494 7,048,529 - 7,048,529

Increase (decrease) in net assets (16,403) 17,091 688 (151,815) 14,178 (137,637)

Net assets, beginning of year 1,055,994 73,091 1,129,085 1,207,809 58,913 1,266,722

Net assets, end of year 1,039,591$ 90,182 1,129,773 1,055,994$ 73,091 1,129,085

Year Ended June 30, 2015 Year Ended June 30, 2014



Statements of Activities


Operating Activities 2015 2014Change in net assets 688$ (137,637) Adjustments to reconcile change in net assets

to net cash flows from operating activities:Depreciation 297,885 369,142 Change in:

Grants receivable 1,117 (2,267) Prepaid expenses 36,392 (8,992) Accounts payable and accrued expenses 169,852 6,507

Net cash provided by operating activities 505,934 226,753

Investing ActivitiesPurchases of property and equipment (504,348) (122,192)

Net cash used by investing activities (504,348) (122,192)

Financing ActivitiesPrincipal reduction of capital lease obligations (166,616) (157,265) Proceeds from long-term debt 198,310 - Principal repayment of long-term debt (111,853) (99,981)

Net cash used by financing activities (80,159) (257,246) Net decrease in cash (78,573) (152,685)

Cash, beginning of year 790,380 943,065

Cash, end of year 711,807$ 790,380

Supplemental disclosures: Property and equipment obtained under capital leases 107,052$ 14,800 Cash payments for interest expense 110,734 150,928

Year Ended June 30



Statements of Cash Flows

-6-

CENTRAL INDIANA MILITARY ACADEMY, INC. d/b/a


Notes to Financial Statements

June 30, 2015 and 2014 (1) Summary of Significant Accounting Policies General Central Indiana Military Academy, Inc. d/b/a Anderson Preparatory Academy (the

"School") is a public benefit not-for-profit organization incorporated under the laws of the State of Indiana. The School operates a public charter school established under Indiana Code 20-24 serving grades kindergarten through twelve and sponsored by Ball State University.

Accounting Estimates The preparation of financial statements in conformity with accounting principles generally

accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Actual results could differ from those estimates.

Revenue Recognition Revenues primarily come from resources provided under the Indiana Charter Schools Act.

Under the Act, the School receives an amount per student in relation to the funding received by other public schools in the same geographic area. Funding from the State of Indiana is based on enrollment, and paid in monthly installments in July through June coinciding with the academic school year. Revenue is recognized in the year in which the educational services are rendered.

A portion of the School’s revenue is the product of cost reimbursement grants. Therefore,

the School recognizes revenue under these grants in the amounts of costs and expenses at the time they are incurred.

Grants Receivable Grants receivable relate primarily to activities funded under federal programs. The School

believes that it is operating in compliance with regulatory requirements and as such no allowance for doubtful accounts is deemed necessary.

-7-



Notes to Financial Statements (1) Summary of Significant Accounting Policies, Continued Financial Statement Presentation The School reports its financial position and activities according to two classes of net assets

as follows:

Unrestricted net assets, which represent net assets that the Board of Directors has discretionary control to use in carrying on the activities of the School in accordance with its articles of incorporation and by-laws.

Temporarily restricted net assets, which represent net assets restricted by the donor,

grantor, or other outside party for a specific purpose or until the passage of time. Contributions and Fees The School receives resources from participation fees and fundraising events that support

certain school activities. These receipts are reported as restricted support in that they are received with stipulations that limit their use. When a donor restriction expires, that is, when the purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions.

Taxes on Income Central Indiana Military Academy, Inc. has received a determination from the U.S.

Treasury Department stating that it qualifies under the provisions of Section 501(c)(3) of the Internal Revenue Code as a tax-exempt organization; however, the School would be subject to tax on income unrelated to its tax-exempt purpose. For the years ended June 30, 2015 and 2014, no accounting for federal and state income taxes was required to be included in the accompanying financial statements.

-8-




(1) Summary of Significant Accounting Policies, Continued Taxes on Income, Continued Professional accounting standards require the School to recognize a tax liability only if it

is more likely than not the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax liability that is greater than 50% likely of being realized on examination. For tax positions not meeting the more-likely-than-not test, no tax liability is recorded. The School has examined this issue and has determined that there are no material contingent tax liabilities or questionable tax positions. Tax years ending after 2011 are open to audit for both federal and state purposes.

Property and Equipment Purchases of these assets and expenditures that materially increase value or extend useful

lives are capitalized and are included in the accounts at cost. Routine maintenance and repairs, minor replacement costs, and equipment purchases with a unit cost of less than $1,000 are charged to expense as incurred.

Depreciation is provided over the estimated useful lives of the respective assets using the

straight-line method. The estimated useful lives generally are as follows: Buildings and improvements ...................... 10 to 40 years Furniture and equipment ............................ 3 years Textbooks ................................................... 4 years Vehicles ...................................................... 5 years Subsequent Events The School evaluated subsequent events through January 11, 2016, the date these financial

statements were available to be issued. Events occurring through that date have been evaluated to determine whether a change in the financial statements or related disclosures would be required.

-9-




(2) Long-Term Debt Long-term debt at June 30, 2015 and 2014 was comprised of: 2015 2014

Mortgage loan payable to MainSource Bank, payable in monthly installments of $4,214 including interest at 4.85% per annum (adjustable annually beginning September 2019) through July 2026, secured by a mortgage on School facilities and all business assets ................................. $ 431,785 460,110

Mortgage loan payable to MainSource Bank, payable in monthly installments of $3,224 including interest at 4.85% per annum (adjustable annually beginning September 2019) through March 2029, secured by a mortgage on School facilities and all business assets ................................. 384,479 403,483

Mortgage loan payable to MainSource Bank,

payable in monthly installments of $7,341 including interest at 4.85% per annum (adjustable annually beginning August 2019) through August 2026, secured by a mortgage on School facilities and all business assets ................................. 755,784 -

Mortgage loan payable to MainSource Bank,

payable in monthly installments of $3,761 including interest at 4.85% per annum (adjustable annually beginning August 2019) through July 2026, secured by a mortgage on School facilities and all business assets ................................................ 384,275 -

-10-




(2) Long-Term Debt, Continued 2015 2014

Mortgage loan payable to IFF, payable in monthly installments of $8,017 including interest at 6% per annum (adjustable every five years) through December 2025, refinanced in August 2014 ............. - 797,753

Mortgage loan payable to IFF, payable in monthly

installments of $2,025 including interest at 6% per annum (adjustable every five years) through July 2026, refinanced in August 2014 ....................... - 208,520

1,956,323 1,869,866 Less: current maturities (128,902) (101,474) $1,827,421 1,768,392 Principal maturities of long-term debt are as follows: Year Ended June 30: 2016 .................................................................... $ 128,902

2017 .................................................................... 135,641 2018 .................................................................... 142,463

2019 .................................................................... 149,628 2020 .................................................................... 156,978 Thereafter ........................................................... 1,242,711 $1,956,323 (3) Revolving Line of Credit The School has a $100,000 revolving line of credit to provide short-term financing, which

is secured by all business assets. Bank advances on the credit line carry an interest rate of .75% above the lender’s prime rate. There were no advances outstanding on the line of credit as of June 30, 2015 and 2014.

-11-




(4) Leases The School leases various items of equipment under capital leases. At June 30, 2015, the

cost and accumulated depreciation relating to these assets were $872,732 and $772,019, respectively ($765,680 and $673,123 at June 30, 2014).

Following is a schedule of future minimum lease payments under capital leases and the

present value of the net minimum lease payments as of June 30, 2015: Year Ended June 30: 2016 ...................................................................... $180,382

2017 ...................................................................... 44,667 2018 ...................................................................... 28,290

2019 ...................................................................... 25,063 278,402 Less: amount representing interest ......................... (28,063) $250,339 The School also leases various items of equipment under operating leases. Total expense

under these operating leases for 2015 and 2014 was $44,759 and $50,558, respectively. Minimum future rental payments as of June 30, 2015 for all operating leases with initial, noncancellable lease terms in excess of one year are as follows:

Year ending June 30: 2016 ...................................................................... $ 13,805 2017 ...................................................................... 13,127 2018 ...................................................................... 12,178 2019 ...................................................................... 7,104

-12-



Notes to Financial Statements (5) Retirement Plans The School provides retirement benefits covering substantially all full-time employees.

Retirement benefits for teaching personnel are provided by the Indiana State Teachers’ Retirement Fund (“TRF”), which is a cost-sharing multiple-employer defined benefit retirement plan governed by the State of Indiana and administered by the Indiana Public Retirement System (“INPRS”) Board. Contribution requirements of plan members are determined annually by the INPRS Board. For the years ended June 30, 2015 and 2014, the School contributed 7.5% of compensation for eligible teaching personnel to TRF. Should the School elect to withdraw from TRF, it could be subject to a withdrawal fee. The School’s contributions represent an insignificant percentage of the total contributions received by TRF. As of June 30, 2014 (the latest year reported), TRF was more than 80% funded. A copy of the complete annual report for the year ended June 30, 2014 can be obtained at:

www.in.gov/inprs/files/2014INPRSCAFRBook_Web.pdf

All other employees are eligible to participate in a School-sponsored Section 403(b) plan.

Under this plan, the School contributes 6% of compensation, as defined. Additional contributions may be made at the discretion of the Board of Directors. No discretionary contributions were made in 2015 or 2014. Retirement plan expense under both plans was $200,468 and $225,357 for the years ended June 30, 2015 and 2014, respectively.

(6) Commitments The School operates under a charter granted by Ball State University. As the sponsoring

organization, Ball State University exercises certain oversight responsibilities. Under this charter, the School has agreed to pay to Ball State University an annual administrative fee equal to 3% of state tuition support. Payments under this charter agreement were $112,840 and $119,388 for the years ended June 30, 2015 and 2014, respectively. The charter remains in effect until June 30, 2016, and is renewable thereafter by mutual consent.

http://www.in.gov/inprs/files/2014INPRSCAFRBook_Web.pdf

-13-




(6) Commitments, Continued

The School executed a service contract for network and technology services. Under this contract, the School has committed to make annual payments of $75,768 through April 1, 2016 with the option to purchase additional services for which the School is billed as services are provided. The School has the option to terminate the agreement with 30 days notice. Payments under this agreement were $88,069 and $79,399 for the years ended June 30, 2015 and 2014, respectively.

(7) Risks and Uncertainties The School provides educational instruction services to families residing in Madison and

surrounding counties in Indiana, and is subject to the risks of economic and competitive forces at work within this geographic area.

The majority of revenues relate to legislation enacted by the State of Indiana and grants

awarded under federal programs. Changes in state or federal legislation could significantly affect the School. Additionally, the School is subject to monitoring and audit by state and federal agencies. Those examinations may result in additional liability to be imposed on the School.

Financial instruments that potentially subject the School to concentrations of credit risk

consist principally of receivables from the State of Indiana. At June 30, 2015, substantially all of the receivable balance was due from the State of Indiana. In addition, bank deposits are maintained primarily at MainSource Bank, and are insured up to the FDIC insurance limit.

-14-




(8) Functional Expense Reporting The costs of providing the educational activities have been summarized on a functional

basis in the statement of activities. Accordingly, certain expenses have been allocated between program and management services. Following is a summary of expenses comprising each program and service for the years ended June 30, 2015 and 2014:

2015 Program Management Services and General Salaries and wages ................................... $ 3,159,388 613,483 Employee benefits ................................... 594,534 106,972 Professional services ............................... 265,727 118,397 Staff development .................................... 15,002 5,383 Authorizer oversight fee .......................... - 112,840 Transportation ......................................... 18,799 - Property rental and maintenance ............. 273,862 - Classroom, kitchen and office supplies ... 320,683 21,546 Occupancy ............................................... 398,575 - Depreciation ............................................ 297,885 - Interest ..................................................... 105,035 5,699 Insurance ................................................. - 120,343 Other ........................................................ 36,927 69,414 $ 5,486,417 1,174,077

-15-




(8) Functional Expense Reporting, Continued 2014 Program Management Services and General Salaries and wages ................................... $ 3,151,503 628,086 Employee benefits ................................... 824,819 150,538 Professional services ............................... 243,284 127,276 Staff development .................................... 15,381 7,022 Authorizer oversight fee .......................... - 119,388 Transportation ......................................... 2,406 - Property rental and maintenance ............. 315,489 - Classroom, kitchen and office supplies ... 317,404 22,907 Occupancy ............................................... 422,407 - Depreciation ............................................ 369,142 - Interest ..................................................... 115,864 35,064 Insurance ................................................. - 102,399 Other ........................................................ 30,848 47,302 $ 5,808,547 1,239,982

See accompanying Independent Auditor's Report.See accompanying notes to this schedule.

-16-

Pass-Through TotalFederal Entity Federal

Federal Grantor Agency/Pass-Through Entity/ CFDA Identifying AwardsCluster Title/Program Title/Project Title Number Number Expended

U.S. DEPARTMENT OF AGRICULTUREPass-Through Indiana Department of Education

Child Nutrition ClusterNational School Lunch Program 10.555 94,642$

Total for federal grantor agency 94,642

U.S. DEPARTMENT OF EDUCATIONPass-through Indiana Department of Education

Title I, Part A ClusterGrants to Local Educational Agencies 84.010 14-9790 29,375

15-9790 223,264

Special Education ClusterSpecial Education - Grants to States 84.027 14214-521-PN01 100,955

14215-521-PN01 65,843

Improving Teacher Quality State Grants 84.367 107,186

Total for federal grantor agency 526,623

Total federal awards expended 621,265$

Year Ended June 30, 2015



Schedule of Expenditures of Federal Awards

-17-



Notes to the Schedule of Expenditures of Federal Awards


(1) Basis of Presentation The accompanying schedule of expenditures of federal awards (the “Schedule”) includes

the federal grant activity of Central Indiana Military Academy, Inc. d/b/a Anderson Preparatory Academy (the “School”) under programs of the federal government for the year ended June 30, 2015. The information in this schedule is presented in accordance with the requirements of the Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Because the Schedule presents only a selected portion of the operations of the School, it is not intended to and does not present the financial position, changes in net assets or cash flows of the School.

(2) Summary of Significant Accounting Policies Expenditures reported on the Schedule are reported on the accrual basis of accounting.

Such expenditures are recognized following the cost principles contained in OMB Circular A-122, Cost Principles for Non-Profit Organizations, wherein certain types of expenditures are not allowable or are limited as to reimbursement.

-18-

INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH

GOVERNMENT AUDITING STANDARDS

The Board of Directors Central Indiana Military Academy, Inc. We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of Central Indiana Military Academy, Inc. d/b/a Anderson Preparatory Academy (the “School”), which comprise the statement of financial position as of June 30, 2015, and the related statements of activities and cash flows for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated January 11, 2016. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the School’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the School’s internal control. Accordingly, we do not express an opinion on the effectiveness of the School’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

-19-

Compliance and Other Matters As part of obtaining reasonable assurance about whether the School’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the School’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the School’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.


-20-

INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY

OMB CIRCULAR A-133

The Board of Directors Central Indiana Military Academy, Inc. Report on Compliance for Each Major Federal Program We have audited Central Indiana Military Academy, Inc. d/b/a Anderson Preparatory Academy’s (the “School”) compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of the School’s major federal programs for the year ended June 30, 2015. The School’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. Management’s Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. Auditor’s Responsibility Our responsibility is to express an opinion on compliance for each of the School’s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the School’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the School’s compliance.

-21-

Opinion on Each Major Federal Program In our opinion, Central Indiana Military Academy, Inc. complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2015. Report on Internal Control Over Compliance Management of Central Indiana Military Academy, Inc. is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the School’s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the School’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other purpose.


-22-



Schedule of Findings and Questioned Costs


I. Summary of Auditor’s Results Financial Statements Type of auditor’s report issued: Unmodified Internal control over financial reporting: Material weaknesses: None Reported Significant deficiencies that are not

considered to be material weaknesses: None Reported Noncompliance noted which is material to financial statements: No Federal Awards Internal control over major programs: Material weaknesses: None Reported Significant deficiencies that are not

considered to be material weaknesses: None Reported Type of auditor’s report issued on compliance for major program: Unmodified Audit findings disclosed that are required to be reported in accordance with section 510(a) of Circular A-133: No

-23-



Schedule of Findings and Questioned Costs


I. Summary of Auditor’s Results, Continued Identification of major programs: CFDA Number Name of Federal Program or Cluster Special Education Cluster 84.027 Special Education - Grants to States

Dollar threshold used to distinguish between Type A and Type B programs: $300,000 Auditee qualified as low-risk auditee: Yes

II. Financial Statement Findings No matters were reportable.

III. Federal Award Findings and Questioned Costs No matters were reportable.

-24-



Other Reports


The reports presented herein were prepared in addition to another official report prepared for the School as listed below:

Supplemental Audit Report of Central Indiana Military Academy, Inc. d/b/a Anderson Preparatory Academy

The Supplemental Audit Report contains the results of compliance testing required by the Indiana State Board of Accounts under its Guidelines for the Audits of Charter Schools Performed by Private Examiners pertaining to matters addressed in its Accounting and Uniform Compliance Guidelines Manual for Indiana Charter Schools.

STATE OF INDIANA › sboa › WebReports › B46007.pdf · presentation of the financial...

Documents

Transcript of STATE OF INDIANA › sboa › WebReports › B46007.pdf · presentation of the financial...